Honda Postpones Billion-Dollar Investments in Canada Due to Decreased Demand for Electric Vehicles
The company Honda has decided to postpone its $15 billion investments in Canada for two years. This concerns the construction of an electric vehicle manufacturing plant and a battery complex in Ontario. The decision is related to the decreased demand for electric cars, as well as political changes in the USA following Donald Trump’s return to the presidency.
In a letter to shareholders, Honda noted that it is closely monitoring market trends but cannot yet specify the exact timelines for resuming the project.
“We need to observe the situation for the next two years before making final decisions,” stated the company’s CEO Toshihiro Mibe.
A representative of Honda Canada confirmed that the delay will not affect jobs or production volumes in the country.
Demand for Electric Vehicles is Growing, But Slower Than Expected
Despite Honda’s statements about a “slowdown,” sales of electric vehicles in Canada and the USA continue to increase. Last year, they accounted for 11.4% and 8.1% of total new car sales, respectively. However, the growth rate turned out to be lower than forecasts, which has forced automakers to adjust their strategies.
Consequences of the Project Postponement
Honda’s investment plan, which former Canadian Prime Minister Justin Trudeau called “the largest in the country’s history,” envisaged the construction of a plant with a capacity of 240 thousand electric vehicles per year and battery production of 36 GWh. Due to the delay, the company also plans to partially shift production to its plant in Ohio to reduce the impact of tariffs introduced by the Trump administration.
This situation highlights how political factors and market fluctuations can influence global business decisions. Even in conditions of stable, but not explosive, growth in electric vehicle sales, companies are forced to adapt their plans to remain competitive. Honda, like other manufacturers, is seeking a balance between long-term investments and current economic realities.